Environmental Compliance: Full Immunity Is Key

In the Great Lakes State, we have enjoyed one of the most remarkable economic runs in our history over the last few years. Unemployment has fallen to record lows and the number of people with jobs has risen to record highs. The most recent figures show Michigan leads the nation in personal income growth.

Business is booming in our state and this administration has worked hard to help make that happen. We’ve cu business taxes and reduced the amount of red tape employers need to wade through in dealing with state government. Most recently, we introduced 11 Renaissance Zones, which offer firms the incentive of no taxes for locating in certain areas of our state. With this surge of prosperity and growth, my administration remains vigilant in ensuring a proper balance between business and environmental needs.

In March 1997, I signed the Environmental Audit Privilege and Immunity Law to encourage thousands of businesses, as well as municipalities and public agencies, to comply with environmental regulation. This law grants businesses a privileged status and immunity from fines and penalties if they conduct a self-audit and promptly disclose and correct any violations found. This is a significant move toward increased compliance with Michigan’s environmental laws.

Until the Immunity Law was put on the books, a vast number of small businesses had been outside the environmental regulatory structure. It is virtually impossible for the Department of Environmental Quality to inspect every facility and, as a result, it was estimated that thousands of firms did not have the necessary permits, licenses, or approvals required under various state and federal environmental protection statutes.

Michigan needed a mechanism to remove barriers and provide incentives for businesses to identify violations, step forward, and correct them. The fear of penalties, however, was a significant barrier to small companies disclosing violations and seeking necessary permits to comply with environmental laws.

Likewise, the fear that the state or third parties would use self-audit information to pinpoint otherwise unknown violations cast a chilling effect on companies’ willingness to conduct audits. Granting immunity encourages many of these businesses to come into compliance with our environmental laws.

It is important to note that the state’s vigorous enforcement network remains intact, and that information previously required to be reported or made available is not affected under this law. Virtually all of the information used in the state’s regulatory programs is still available. One of the criticisms of this law is that granting full immunity is too generous. Even at the federal level, the Environmental Protection Agency only allows for “greatly reduced penalties.” But that is not enough of an incentive to reach the maximum level of compliance that we seek here in the Great Lakes State.

While statistics are not yet available to show an expected increase in the number of self-reports filed in Michigan, my administration remains very confident that this is the right avenue to take to increase compliance.

We’re not alone. The Detroit News agreed that the measure would “strengthen regulatory compliance and expedite clean-ups,” and at least 15 other states have passed environmental self-audit legislation. Several more states have legislation pending.

I appreciate the support of the Michigan Chamber of Commerce in enacting the Audit Privilege Law. Our natural resources are better protected as a result.

Environmental Compliance: Full Immunity Is Key

by Governor John Engler (R-Michigan)

In the Great Lakes State, we have enjoyed one of the most remarkable economic runs in our history over the last few years. Unemployment has fallen to record lows and the number of people with jobs has risen to record highs. The most recent figures show Michigan leads the nation in personal income growth.

Business is booming in our state and this administration has worked hard to help make that happen. We’ve cu business taxes and reduced the amount of red tape employers need to wade through in dealing with state government. Most recently, we introduced 11 Renaissance Zones, which offer firms the incentive of no taxes for locating in certain areas of our state. With this surge of prosperity and growth, my administration remains vigilant in ensuring a proper balance between business and environmental needs.

In March 1997, I signed the Environmental Audit Privilege and Immunity Law to encourage thousands of businesses, as well as municipalities and public agencies, to comply with environmental regulation. This law grants businesses a privileged status and immunity from fines and penalties if they conduct a self-audit and promptly disclose and correct any violations found. This is a significant move toward increased compliance with Michigan’s environmental laws.

Until the Immunity Law was put on the books, a vast number of small businesses had been outside the environmental regulatory structure. It is virtually impossible for the Department of Environmental Quality to inspect every facility and, as a result, it was estimated that thousands of firms did not have the necessary permits, licenses, or approvals required under various state and federal environmental protection statutes.

Michigan needed a mechanism to remove barriers and provide incentives for businesses to identify violations, step forward, and correct them. The fear of penalties, however, was a significant barrier to small companies disclosing violations and seeking necessary permits to comply with environmental laws.

Likewise, the fear that the state or third parties would use self-audit information to pinpoint otherwise unknown violations cast a chilling effect on companies’ willingness to conduct audits. Granting immunity encourages many of these businesses to come into compliance with our environmental laws.

It is important to note that the state’s vigorous enforcement network remains intact, and that information previously required to be reported or made available is not affected under this law. Virtually all of the information used in the state’s regulatory programs is still available. One of the criticisms of this law is that granting full immunity is too generous. Even at the federal level, the Environmental Protection Agency only allows for “greatly reduced penalties.” But that is not enough of an incentive to reach the maximum level of compliance that we seek here in the Great Lakes State.

While statistics are not yet available to show an expected increase in the number of self-reports filed in Michigan, my administration remains very confident that this is the right avenue to take to increase compliance.

We’re not alone. The Detroit News agreed that the measure would “strengthen regulatory compliance and expedite clean-ups,” and at least 15 other states have passed environmental self-audit legislation. Several more states have legislation pending.

I appreciate the support of the Michigan Chamber of Commerce in enacting the Audit Privilege Law. Our natural resources are better protected as a result.